A new report by consulting firm AlixPartners has suggested the ongoing semiconductor chip shortage is expected to cost the global automotive industry an estimated $210 billion in revenue in 2021.
That’s almost double the company’s previous forecast, in May, of $110 billion. It had initially projected some $60.6 billion in lost revenues at the beginning of the year, when automakers started cutting production at plants.
“Of course, everyone had hoped that the chip crisis would have abated more by now, but unfortunate events such as the Covid-19 lockdowns in Malaysia and continued problems elsewhere have exacerbated things,” said Mark Wakefield, global co-leader of the automotive and industrial practice at AlixPartners.
AlixPartners forecasts that 7.7 million units of production will be lost in 2021 – up from 3.9 million in its May forecast.
The updated figures come as car manufacturers continue to struggle with the semiconductor chip shortage, which is causing a halt to production in plants across North America, Europe, and Asia.
The growing demand for consumer electronics has worsened the scarcity of the microchips used in vehicles, stalling production at factories worldwide and pushing auto prices ever higher. Semiconductor chips are vital components in new cars and widely used in infotainment systems, as well as in basic parts such as power steering and brakes. An average vehicle may have hundreds of semiconductor chips.
AlixPartners previously expected to see production improving in the third quarter of 2021, but now doesn’t expect to see that until at least the second quarter of 2022.
Dan Hearsch, a managing director in AlixPartners’ automotive and industrial practice, said, “There’s no cushion. There’s nothing to absorb the impacts anymore, so every little thing – a week of downtime – is now creating a month of downtime someplace else.”
Meanwhile, automakers across the globe, including Ford Motor and General Motors, have been warning of massive earnings cuts this year due to the chip shortage. General Motors President Mark Reuss said this week that the chip supply was coming from places where Covid-19 vaccination is low, “so there’s some volatility there … we really need to get the vaccination and protocols into those plants, which we’re working very hard on.”
A major allegation was made against the Federal Bureau of Investigation (FBI) earlier this week concerning the massive ransomware attacks that plagued the US this summer.
The agency reportedly obtained the digital key to decrypt malware on the computers of hundreds of businesses and institutions, but refused to use it for at least three weeks.
RT’s Boom Bust is joined by Todd Shipley, President of Dark Intel, to gain some expert insight into both the allegations and the wave of ransomware attacks hitting the nation.
The number of nuclear power units in Russia will be increased at most of the country’s operational nuclear power plants, according to Director General of the State Atomic Energy Corporation Rosatom, Aleksey Likhachev.
“We will be gradually decommissioning Soviet units built in the 1970s. They will be replaced with about 15 units by 2035,” Likhachev, who’s heading the Russian delegation at the 65th IAEA General Conference in Vienna, Austria told reporters.“Our task is to build them on the existing sites, to expand the existing plants with new units. All of them will be generations 3+, with a capacity of 1,200 MW,” he said.
Rosatom’s chief also talked about low-power nuclear power plants: “A relevant decision has been made, and we switched to its practical implementation, namely the construction of a flotilla of small nuclear power plants based on RITM reactors that will be used in the development of the Baimskoye ore deposit, as well as the land-based version of the RITM-200 for the Kyuchus gold deposit in Yakutia. That means that we have already started implementing low-capacity projects both in Chukotka and Yakutia.”
British transport minister Grant Shapps has urged Britons to behave normally and stop making a fuss over fuel by queuing at filling stations and buying up petrol.
“There’s plenty of fuel, there’s no shortage of the fuel within the country,” the minister said, as quoted by Sky News
“So the most important thing is actually that people carry on as they normally would and fill up their cars when they normally would, then you won’t have queues and you won’t have shortages at the pump either,” he added.
Shapps also said that the country’s authorities were stepping in to ease the shortage of haulage drivers bringing fuel to petrol stations.
The government announced plans to issue 5,000 three-month visas for drivers of fuel tankers and food lorries, and 5,500 for poultry workers amid a severe labour crisis that has caused difficulties for several sectors, from supermarkets to fast-food chains in recent months.
Earlier this week, Shapps blamed the fuel issues on logistics problems, saying that the country has been plagued by the lack of lorry drivers, while UK refineries had “plenty of petrol” stockpiled. He also suggested that London might bring in the army to distribute fuel and other goods.
The fuel supply issues come amid a deepening gas crunch experienced by the UK over the past few weeks with skyrocketing prices already pushing a lot of smaller energy enterprises out of business.
Asian states are on course to double their spending on food by 2030 to some $8 trillion, with over $1.5 trillion of investment needed to keep up with the demand, a new report finds.
According to joint findings of investment firms PwC, Rabobank and Temasek, much of the spending increase will come from the fast population growth in the region, expected to reach 4.5 billion people by 2030.
Changing consumer habits is another factor contributing to increased demand, with people in the region increasingly turning toward healthy food.
“Folks want healthier food, they want safer food, they want to buy online, they want food that is sustainable,” Anuj Maheshwari, managing director of agribusiness at Temasek, told CNBC.
All this will inevitably lead to Asia becoming the world’s largest food and beverage market in less than a decade, the report states.
According to the findings, India and Southeast Asia will boost spending the most, however, China will retain its position as the largest market overall.
The report states that some $1.55 trillion of investment will be required across the entire Asian food chain to meet the growing demand, which could be a great commercial opportunity for investors.
The report urged producers and investors to shift their focus to six “critical trends,” including healthy diets, fresh produce, safe sources, sustainable consumption, alternative proteins and online purchasing.
“These trends (are) what agribusinesses need to focus on and make sure consumers can get this kind of food in addition to the volume that we need in places like Asia,” Maheshwari summed up.
